Help super-size your little one's future

Investing for your kids is a great way to set them up for success. And it’s easier than you might think. Here’s how.

Cute baby sleeping on her mothers shoulder

Between increasing house prices and the soaring cost of living, many young Australians are having to rely on a cash injection from the Bank of ‘Mum and Dad’ to buy their own homes. According to research*, a sum of $10,000 can make a huge difference. But if the thought of ponying up that much cash in one hit makes your stomach churn, start building that nest egg now. Pint-sized amounts of cash now can turn into a game-changing amount by the time they’re old enough to drive you to the open home.

 

Baby steps

Kids want to do everything themselves - and for the most part, you should let them. But one thing you can do for them today (that they may even thank you for in a few tomorrows) is invest. If you start with a small, regular amount and let the gains build up over time, the returns can actually be greater than what a bank account gives. Even better, if you involve your kids in the process, it can be a great way to build their financial literacy too.

 

Look who’s talking

When your kids are young, try talking to them about the importance of saving so they begin to understand concepts like goal setting, delayed gratification and even the notion of setting cash aside for a rainy day. Then as they get older, you can discuss the buying and selling of shares, how these can go up and down in value, and the benefits of variety (aka diversification). Keep money conversations relatable – our fun and colourful ‘learn about investing’ worksheet for kids can help.

 

Trading places

With a Commsec Minor Trust Account, investing for your kids is easy. It creates an informal trust, with a trustee (you) and a beneficiary (your child). You then buy and hold shares for your child, which can be transferred to an account in their own name when they turn 18.

And you don’t have to be the child’s parent. A CommSec Minor Trust Account can be opened and topped up by any adult related to the child – think grandparents, guardians, aunts and uncles. So there’s Christmas sorted for the next 18 years. A slightly “out of the box” gift idea that will help bring a loved one closer to owning their own property one day... beats putting another pair of socks under the tree.

 

Kick-start your child’s financial future with a CommSec Minor Trust Account.

And before you dive in, check out Six ways to research stocks or How to manage your risk when investing to brush up on your investing skills. If it’s been awhile, or if you have older kids who would like to learn about the basics of share investing, the CommSec Invest podcast can be a fantastic place to start.

 

 

*Whelan, S., Atalay, K. , Barrett, G. , Cigdem-Bayram, M. and Edwards, R. (2023) Transitions into home ownership: a quantitative assessment, AHURI Final Report No. 404, Australian Housing and Urban Research Institute Limited, Melbourne. Please note that all investing comes with risk.

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Important information

Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945. CommSec is a Market Participant of ASX Limited and Cboe Australia Pty Limited (formerly Chi-X Australia Pty Limited), a Clearing Participant of ASX Clear Pty Limited and a Settlement Participant of ASX Settlement Pty Limited.

This information is not advice and is general in nature. The information has been prepared without taking account of the objectives , financial situation or needs of any particular individual. For this reason, any individual should, before acting on this information, consider the appropriateness of the information, having regards to the individual's objectives , financial situation or needs, and, if necessary, seek appropriate professional advice. You can view the CommSec Terms and Conditions, Product Disclosure Statements, Best Execution Statement and Financial Services Guide, and should consider them before making any decision about these products and services.

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© Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945. CommSec is a Market Participant of ASX Limited and Cboe Australia Pty Limited, a Clearing Participant of ASX Clear Pty Limited and a Settlement Participant of ASX Settlement Pty Limited.

The information on this page has been prepared without taking into account your objectives, financial situation or needs. For this reason, any individual should, before acting on this information, consider the appropriateness of the information, having regards to their objectives, financial situation or needs, and, if necessary, seek appropriate professional advice.

CommSec does not give any representation or warranty as to the accuracy, reliability or completeness of any content on this page, including any third party sourced data, nor does it accept liability for any errors or omissions.

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